Which of the Following Is the Most Important Reason to Encourage

question 98

Multiple Choice

Which of the following is the most important reason to encourage foreign investment?

• A) Improve global image of the country.
• B) Accelerate the development of an economy.
• C) Evade political tensions between countries.
• D) Minimize negative political fallouts within the domestic economy.
• E) Improves ties between the investing country and the host country.

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Definitions:

Discretionary Policy

Discretionary Policy involves the deliberate use of monetary or fiscal policy changes by government policymakers to address economic issues.

Monetary Policy

Actions undertaken by a central bank to control the supply of money and interest rates in its economy.

Fiscal Policy

Government policies related to taxation and government spending to influence the economy.

Lags

Lags refer to the delay between the implementation of economic policy or action and its actual effect on the economy, often observed in fiscal and monetary policies.